NZ tech investment tops $1 billion, but we have a long way to go to improve diversity

Investment in Aotearoa’s technology companies has hit $1 billion. But just because the cash is flowing doesn’t mean we can rest on our laurels, especially when it comes to diversity and the under-representation of women and minorities.

Investment in New Zealand’s technology companies continues to rise, with record amounts of funding coming from offshore investors, according to the second annual Investor’s Guide to the New Zealand Technology Sector. Published by the Ministry of Business, Innovation and Employment (MBIE) and the Technology Investment Network (TIN), the guide showcases the Land of the Long White Cloud’s diverse range of high-growth technology companies, innovation capabilities, and supportive business environment.

The numbers are certainly rather rosy. Findings show that either venture capital or publicly funded investment is a major driver of growth for more than 50 percent of New Zealand’s fastest-growing tech companies. Additionally, more companies are pursuing offshore investment early on.

Last financial year to March 2017, early stage tech companies received more than $173 million in foreign investment, up from $51 million the previous year. New Zealand-based angel investors also pumped in $69 million, and $7 million came from domestic crowdfunding. Venture capital investment also amounted to about $92 million. Overall, the 2016 calendar year saw a record $1 billion in capital raised – the first time investment has ever reached the billion-dollar mark in New Zealand.

TIN managing director Greg Shanahan said he was pretty excited by the numbers. “I think it’s really strong,” he said of the health of the technology sector. “Record amounts of money are being raised locally by firms to invest in this space, and record amounts of investment are coming from offshore into select companies. Early stage investments from offshore investors are typically larger than are commonly seen in New Zealand. As the source of this money broadens, particularly with growing Asian investment, we can expect the trend to continue.”

Shanahan said a big reason for the increase in investment in New Zealand’s tech companies was a perception of Aotearoa being a “safe” place to invest in, with an emphasis on transparency and openness. The further growth of Asian economies is also helping, he said. “The real accelerator for growth is funding. It’s like watering a plant.”

Simon Feiglin, managing partner of global private equity firm Riverside Company, echoed Shanahan’s praises. “The thing we really like is that as a small and remote country, New Zealand companies almost from conception think globally, and are structured to achieve that objective.”

The report was unveiled on Tuesday evening at an event at accounting firm Ernst & Young’s offices in Auckland’s posh Britomart area. Alongside the release of the report, business leaders from a variety of companies spoke. One of the speakers was Melon Health founder and CEO Siobhan Bulfin, who acknowledged female founders and entrepreneurs, and highlighted the need for greater diversity in Aotearoa’s business sector and among business leaders.

There’s concerning data to back her up. Only three percent of 15-year-old New Zealand schoolgirls usually consider an IT career. Furthermore, women make up just 23 percent of the IT workforce – even though the tech sector has the highest paid and highest-qualified employees of any industry. If that’s not disheartening enough, as Idealog has previously reported, just 13 percent of NZX-listed companies have female directors. Even worse, the number is actually down from 2016, when 14 percent of companies had female directors.

While organisations like NZTech are hoping to encourage more women to go into tech jobs and challenge patriarchal norms (with events like the ShadowTech Days roadshow), Bulfin said diversity also went beyond sex, gender identity, race, creed or national origin, to also include ability or disability and health. “One of my team is bi-polar. And she’s an advocate for speaking out about it.”

Bulfin added her company was a big proponent of the te whare tapa whā approach to health. The term refers to a Māori health model that addresses physical, mental/emotional and spiritual health, as well as the health of whanau. It’s a model, she said, that not just the entire health sector could adopt, but the wider business community and society as a whole.

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